Home Insurance And The Role It Plays In Your Home Purchase
Most everybody understands when they're purchasing a home that they need home insurance. But for whatever reason it seems to get glossed over in many situations. As a home buyer you need to understand that this is part of your obligation when purchasing a home.
If you're buying a townhome or a condominium, chances are you don't need to purchase home insurance because hazard insurance which is the same covers you through your monthly association fee. In some cases it doesn't see you always want to beware when you're purchasing a condominium or a townhome that there's not an additional insurance fee above and beyond your monthly association dues.
If you're purchasing a single-family home, you're going to need to purchase homeowners insurance. However it goes beyond that and it's important for you to understand as a home buyer that you need to purchase a full year's worth a homeowners insurance before you close on that home.
The reason is because when you purchase a home you have an escrow account for your taxes as well as your home insurance. Every six months those bills are paid by your mortgage company. When you make your very first home payment, it will be 1/12th of next year's home insurance. So by purchasing a years worth of home insurance you're actually covering your home for that first year.
In addition there are certain things that you want to look for regarding home insurance. Some companies offer discounts if you bundle your insurance with your car. There are different types of deductibles and plans to choose from. Including replacement cost and other variables. You may even consider an umbrella policy that covers all of your insurance.
Either way this is a very important thing and it's important that you take the time to sit down with a local insurance agent to go over all of your options when purchasing homeowners insurance. Try to remember to do this early on in the process so you're not scrambling at the last minute and overpaying for this service.
For those of you reading this in the Minneapolis-St. Paul area, my recommendation is to go see Brice Skarnes with farmers insurance
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